Breakthrough: More women running banks’ legal departments

Laura O’Hara wanted to be a lawyer all her life, and coming from a family of bankers, perhaps it was inevitable that she would wind up heading the legal department at a major bank.

O’Hara began her career at a law firm in the mid-1980s — she was the only female among dozens of men — then moved on to legal departments at JPMorgan Chase and Citizens Financial Group, where she became increasingly interested in blending the practice of law with the business of running a bank.

In 2015 she was named executive vice president and general counsel at Santander, where she oversaw such functions as risk management and regulatory compliance, and then last year, M&T Bank in Buffalo, N.Y., came knocking. Today O’Hara serves as general counsel at the $123 billion-asset M&T.

“At this point in my career I wanted a true seat at the table to help run the company and work hand in hand with the CEO in a place where I really felt that I could make a difference,” she said in an interview with American Banker.

O’Hara’s career path is one that legal recruiters say they see women increasingly following as they rise to top legal positions in the banking industry: Earn a J.D. at a top law school, log a few years at a law firm and then make the jump to an in-house legal department before ascending to the top post.

The $206 billion-asset SunTrust Banks in Atlanta was the latest of the largest U.S. banks to install a woman in its top legal position when it appointed Ellen Fitzsimmons as general counsel. Like O’Hara, Fitzsimmons also worked at a law firm for several years before moving to the in-house legal department of the transportation company CSX Corp. She was general counsel at CSX since 2003, until she joined SunTrust earlier this month.

Goldman Sachs also recently named a woman, Karen Patton Seymour, as its co-general counsel and partner, to work alongside Greg Palm, who has been general counsel at Goldman since 1992. She had previously been a partner at the firm of Sullivan & Cromwell.

JPMorgan Chase, American Express, Huntington Bancshares and TD Bank are among some other large U.S. banks and financial services companies that have women as their general counsels. (TD’s general counsel, Ellen Patterson, also oversees legal, compliance and anti-money-laundering globally for TD’s Toronto-based parent.)

H. Rodgin Cohen, the senior chairman of Sullivan & Cromwell, said it makes sense women are now rising to top legal positions in the banking industry. Women have made up close to half of American law school students for a while now, and “one would hope you’d start to approximate 50% in the legal profession,” he said.

“I’ll be optimistic and say that I think so many [women] have risen because banks are recognizing quality,” he said.

The increasing supply of experienced female lawyers is certainly one reason behind the shift. Another has to do with the way that companies seek out candidates for general counsel positions. And as more women enter the law profession, or any profession really, they’re also changing the status quo in ways that subtly act on decision makers’ implicit biases.

“It will take time" to achieve full gender parity, "but if you go back 10 years ago, you would have had nothing like this,” Cohen said. “There might have been one or two" women general counsels at large U.S. banks. "So I think the banking industry is being progressive, or just realistic, in recognizing talent.”

“At this point in my career I wanted a true seat at the table to help run the company," said M&T Bank's general counsel, Laura O'Hara.

The numbers suggest he’s onto something, too. According to the search firm Russell Reynolds Associates, women accounted for 16% of all general counsel appointments at Fortune 500 financial services firms between 1992 and 2012.

Over the last five years, women have made up 27% of those appointments. In 2017 alone, six of 11 appointments, or 55%, in the financial services sector were women. Taken altogether, women now occupy 22% of general counsel positions at financial services firms in the Fortune 500, a little less than the 26% across all Fortune 500 firms.

Lawyers and legal recruiters attribute the rise of women to general counsel positions to more than simply an increasing emphasis on diversity in hiring.

It starts with the numbers. In 2016, women surpassed men as the majority of law students for the first time ever, making up 51.3% of all law students enrolled in the United States.

“The supply of female lawyers is quite robust, but now you also have a supply of 15- to 20-year female lawyers who have real leadership skills, gravitas and experience, and they are all ready for the role now,” said Cynthia Dow, who leads the legal officers’ practice at Russell Reynolds. “When you’re hiring a general counsel, you can have a slate that is really gender diverse.”

The way companies have hired general counsels has also changed. Citing an analysis Russell Reynolds conducted of hiring trends at Fortune 500 companies, Dow said that companies across a range of industries are increasingly hiring external candidates from in-house positions at other corporations, as opposed to recruiting them from law firms.

Dow said she thinks that’s because the general counsel role has become more complex and more important in a tighter regulatory environment, so companies seeking a new general counsel may be more inclined to consider candidates who have previous in-house legal experience.

That matters for women’s advancement in the field because women have been particularly successful in moving up to general counsel positions from in-house legal departments, either at the hiring company or from another organization. It also matters because law firms are often still male-dominated.

Michael Roche Kelly, managing director of in-house search at the search firm Parker + Lynch, expressed a similar sentiment. Corporate legal departments sometimes offer a more predictable, though no less demanding, workload than law firms, he said. He also added that most lawyers, regardless of gender, will say they want to move to an in-house legal department at a certain point for this very reason.

What it will take to get more women into other top business-line positions, like CEOs or chief financial officers, is a tougher question to answer, but a study by the Harvard Business School may at least offer a clue.

That study, published in 2016, found that if a pool of potential job candidates contained one woman, her chances of being hired were statistically zero. If there was just one other woman in the hiring pool, however, her chances of getting the job increased by more than 79%.

The researchers concluded that the presence of at least one other diverse candidate changes the status quo and makes that person seem like less of an outlier. That also matters because boards of directors are reluctant to take a gamble on a key hire like general counsel, or any number of other C-suite positions.

While the upper ranks of banking are still dominated by men, women are making strides. KeyCorp, CIT Group and Bank of the West are all headed by women, and women now run major business units at such companies as Citigroup, Bank of America and JPMorgan Chase.

In an interview Friday at the World Economic Forum in Davos, Switzerland, Bank of America Chairman and CEO Brian Moynihan said that chances are “50-50” that the banking giant’s next CEO will be a woman.

"We've been after diversity and inclusion in our company for a long time,” he said. “Our management team is basically half women.”

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